Limited Company v Sole Trader

> the tax comparison.

Minimising the tax paid on profits is a key aim of most SME businesses. The tax benefits of trading through a limited company, as compared to operating as a sole trader or partnership, soon become attractive as profits grow.

Specialist

As the tax calculations below illustrate, based on the UK tax rates and thresholds for 2015/16, a limited company still results in the lower overall tax charge than a sole trader (allowing for the extra accountancy fees incurred through trading as a limited company), whilst profits exceed approximately £14,000 pa:

Commercial matters

Cost and practical matters

The additional administration work and professional fees as a limited company,

The discipline required in keeping personal finances separate from business finances

Credit rating,

Use of certain words in the business name.

How long into the future that you believe the business will continue to trade.

If you have a work offer, there are various solutions to how you could be engaged:

Directly employed (on the books)

Self employed/sole trader consultant

Limited company contractor (IR35 non applying)

Limited company contractor (IR35 applying)

Through an umbrella employment agency

If you require assistance understanding and going through your options, to decide what structure is best advice for your particular unique circumstances, please contact Ian Piper for a free initial consultation. Similarly, if you have already decided andare about to become a start-up business, needing help with registration, annual compliance, etc, please contact us.

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